JP Morgan Reportedly In Talks To Buy Washington Mutual
Facing $19 billion in bad home loans and falling stock prices, Washington Mutual is engaged in a full-on fight to allay investors’ fears that it can weather the latest financial storm. In the past week, the nation’s largest savings and loan has seen a 46-percent drop in its stock, its CEO Kerry Killinger fired, been put on probation by the Office of Thrift Supervision for poor risk management and compliance practices and had its credit ratings reduced by Fitch Ratings and Moody’s Investors Service to below investment grade.
The financial health of the Seattle-based bank apparently is so bad that it could be looking for a buyer. According to a Sept. 12 story in the American Banker, Washington Mutual has entered into “advanced discussions” to sell itself to JPMorgan Chase. The article says that while a deal has not been struck, “negotiations are ongoing at the highest levels of both companies, including James Dimon, the chairman and chief executive of JPMorgan, and Alan Fishman, the newly installed CEO of Wamu.”
This isn’t the first time JP Morgan has expressed interest in Washington Mutual. In March, JP Morgan tried to strike a deal to buy the bank, but was put off when WaMu received a $7 billion capital infusion from TPG Inc., a Fort Worth, Texas-based private-equity firm.
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